Finsbury Food Group has said scale will become increasingly important to food manufacturers as key customers get larger.

The business said it planned to continue to expand through a combination of organic growth and targeted acquisitions in what it described as a “very fragmented market”. Key areas of interest would include the growing markets for artisan bread, free-from and foodservice as it looked to diversify further.

Finsbury made the comments as it announced its preliminary results for the year ended 29 June, with group revenue up 3.8% year on year to £315.3m. Profit before tax rose 203% to £13.6m, while adjusted EBITDA was flat at £25.5m.

The performance has been driven by a combination of organic growth, new business wins and the acquisition of the Ultrapharm free-from business last year.

Finsbury said its “relentless” focus on investment and efficiency had enabled it to navigate the challenging market.

This has helped the company, which, just a few years ago, was primarily a cake business, to diversify. Cakes now account for half the business, bread and morning goods 38% and overseas 12%.

Product innovation has also played a key role, with Finsbury highlighting the launch of free-from brand Wiso in Europe last year. It has also rolled out vegan brioche-style buns to foodservice and is launching vegan cakes.

Licensed brands are an important part of the business, and the company said it enjoyed particular success with Toy Story 4, and the latest Avengers and Spiderman movies.

Upcoming licences that are expected to perform well include Frozen 2 and continued development of the Harry Potter brand, with Finsbury chief executive officer John Duffy telling British Baker that most major studios have strong launches planned.

“This is probably the strongest slate for some time,” he added. “Our cake licensing team is almost spoilt for choice – so many things to play with and so many designs to get behind.”

Duffy said that, in addition to the broader business following consumer trends such as well-being – including free-from and smaller portions – Finsbury was taking this approach to some of its licensed brands.

“Traditionally most of our licensed business would be large cakes, but increasingly we are moving into single-serve food-to-go type products such as bars.”

The company is also launching a free-from product with Mars and is looking to move its large-format cake facility to be nut-free, which would allow it to supply licensed celebration cakes that are guaranteed nut-free.

Artisan breads, which may be handcrafted and require long fermentation, continue to grow well, said Duffy.

“It has gone really well; we’ve got quite a few major customers who would like a bit more of speciality artisan breads,” he explained.

Finsbury has consequently boosted efficiency at its Nicholas & Harris bread bakery in Salisbury with a new divider.

“The divider does a lot of the manual bit and allows people to focus on the make-up, which has given a bit of extra capacity.” added Duffy, who explained the business would look to increase stone-baked oven capacity.

Duffy said any further investment in acquisitions would introduce new product, customer or channel diversification, or accelerate market consolidation in the firm’s main product areas.

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